A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31st, so let’s proceed with the discussion of the hedge fund sentiment on The Duckhorn Portfolio, Inc. (NYSE:NAPA).
Is NAPA a good stock to buy? The best stock pickers were turning bullish. The number of long hedge fund positions moved up by 18 recently. The Duckhorn Portfolio, Inc. (NYSE:NAPA) was in 18 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that NAPA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Richard Driehaus of Driehaus Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a gander at the key hedge fund action surrounding The Duckhorn Portfolio, Inc. (NYSE:NAPA).
Do Hedge Funds Think NAPA Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18 from the previous quarter. The graph below displays the number of hedge funds with bullish position in NAPA over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Select Equity Group held the most valuable stake in The Duckhorn Portfolio, Inc. (NYSE:NAPA), which was worth $24.7 million at the end of the fourth quarter. On the second spot was Driehaus Capital which amassed $18 million worth of shares. Balyasny Asset Management, Woodline Partners, and Alyeska Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Pinz Capital allocated the biggest weight to The Duckhorn Portfolio, Inc. (NYSE:NAPA), around 0.32% of its 13F portfolio. Driehaus Capital is also relatively very bullish on the stock, earmarking 0.27 percent of its 13F equity portfolio to NAPA.
As industrywide interest jumped, specific money managers have been driving this bullishness. Select Equity Group, managed by Robert Joseph Caruso, created the largest position in The Duckhorn Portfolio, Inc. (NYSE:NAPA). Select Equity Group had $24.7 million invested in the company at the end of the quarter. Richard Driehaus’s Driehaus Capital also initiated a $18 million position during the quarter. The other funds with brand new NAPA positions are Dmitry Balyasny’s Balyasny Asset Management, Michael Rockefeller and KarláKroeker’s Woodline Partners, and Anand Parekh’s Alyeska Investment Group.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as The Duckhorn Portfolio, Inc. (NYSE:NAPA) but similarly valued. We will take a look at CVR Energy, Inc. (NYSE:CVI), Triumph Bancorp Inc (NASDAQ:TBK), PennyMac Mortgage Investment Trust (NYSE:PMT), Otter Tail Corporation (NASDAQ:OTTR), Columbia Financial, Inc. (NASDAQ:CLBK), Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM), and Eargo, Inc. (NASDAQ:EAR). This group of stocks’ market valuations resemble NAPA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVI | 18 | 1436736 | -1 |
| TBK | 16 | 270615 | 4 |
| PMT | 8 | 15704 | -7 |
| OTTR | 11 | 58584 | 2 |
| CLBK | 8 | 43463 | 0 |
| HYFM | 14 | 84289 | -5 |
| EAR | 12 | 77544 | -2 |
| Average | 12.4 | 283848 | -1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.4 hedge funds with bullish positions and the average amount invested in these stocks was $284 million. That figure was $96 million in NAPA’s case. CVR Energy, Inc. (NYSE:CVI) is the most popular stock in this table. On the other hand PennyMac Mortgage Investment Trust (NYSE:PMT) is the least popular one with only 8 bullish hedge fund positions. The Duckhorn Portfolio, Inc. (NYSE:NAPA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NAPA is 90. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.5% in 2021 through July 23rd and still beat the market by 10.1 percentage points. Hedge funds were also right about betting on NAPA as the stock returned 37.7% since the end of Q1 (through 7/23) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.